TRANSCRIPT - Sky News Newsday with Kieran Gilbert

PAUL FLETCHER MP

Shadow Minister for Science and the Arts

Shadow Minister for Government Services and the Digital Economy

Manager of Opposition Business in the House

TRANSCRIPT

SKY NEWS NEWSDAY

5 September 2024

Kieran Gilbert: Welcome back to the program. Let's bring in the Manager of Opposition Business, Paul Fletcher. Parliament back next week and pretty big announcement out of parliament today. One of your long time rivals across the political aisle is calling it a day, Bill shorten.

Paul Fletcher: Yes, well, I shadow Bill Shorten in the government services portfolio. So I watch him closely, deal with him regularly. Look, Bill's had obviously a very long political career as a trade union official, and then in the parliament since 2007. Whatever else might be said about him, he's been a very vigorous, uh, and hard working servant of his party, and look, I joined with others in wishing him and Chloe the very best for, you know, this next phase of their life.

Kieran Gilbert: Yeah, and he served as Opposition Leader for across two elections, went close on one occasion, fell well short against Scott Morrison on the other. And it's one of those stories in politics, isn't it, that it's not all glory and triumph, is it? Watching now his long-time rival internally, farewelling him in there, in the Prime Minister's courtyard today in Anthony Albanese.

Paul Fletcher: Well look, I think we all know what we're in for when we get into politics. Bill has given many years of service. Obviously, there are many things I would not agree with him on, but I certainly want to credit his energy levels and his commitment. And there's no doubt that if you want to make a contribution in politics, you need to be ready to work hard and accept the ups and downs. There are no political careers that only have ups. There's plenty of downs in this game.

Kieran Gilbert: Well we saw Mister Howard a little while ago and he had a lot of great moments, but of course lost 2007, lost his own seat. So a good reminder of how that can end up. Paul Fletcher, let's talk about the GDP number this week, only in positive territory because of government spending.

The Treasurer maintains. This shows they've got the balance right to not try and smash the economy at a time of high inflation.

Paul Fletcher: Well the fundamental problem that we've got is that the two arms of economic policy are going in totally opposite directions. Monetary policy, which the Reserve Bank has responsibility for, is focused on trying to slow the economy and therefore bring down inflation, because we know inflation is very sticky, very persistent.

3.8% core inflation on the most recent numbers, well above the RBA's target range of 2% - 3%. We've got higher inflation in the US, the UK, the Euro area, Canada, Sweden, many of the countries we would benchmark ourselves against and sadly, Mister Chalmers seems to be persistently underrating the danger of inflation and how much work is needed to deal with persistent and sticky inflation.

So he's spending almost without restraint, $315 billion of additional spending since he's been the Treasurer. At the last budget for example, 30,000 new public servants committed to, over 20 billion of spending on that over the next four years. 

What needs to happen is we need to see the two arms of economic policy running in a coordinated fashion. We need a back-to-basics agenda with a focus on getting spending under control and also getting productivity back on track, because productivity is collapsing under this government. And the problem with that is that it is only through productivity gains that you can sustainably deliver wage increases.

Kieran Gilbert: Indeed, it's one of the challenges that the economy, that the RBA, government all face. The governor is going to speak in about ten minutes from now. Her message will be, well, we're all watching it very closely, those with mortgages hoping that she might bring forward that schedule of interest rate cuts.

Paul Fletcher: Well fortunately, we have a system where the Reserve Bank is independent. It's got statutory objectives, including of course keeping inflation under control. Because economic history teaches us that once inflation gets out of control, as we saw in the 1970s, when a Whitlam Labor government lost control of the economy and inflation roared ahead. And it took a very long time to get inflation back under control and became a very, very painful process. 

But inflation damages all of our prosperity, damages every Australian. So it is critical that we have a sustained focus on containing inflation. That's what the Reserve Bank is charged with and what's very important is that the Reserve Bank is seen as credible in the things it says about inflation.

That's why this language from Jim Chalmers accusing the Reserve bank of smashing the economy is so dangerous. I mean, that is very deliberate language. The word, smashing connotes a deliberate action, a damaging, a destructive action. That is language he's been using very specifically, and it is not at all helpful. I don't think it's seemly at all for a Treasurer to be using that language.

Kieran Gilbert: Paul Fletcher, appreciate your time, as always. Thanks.

Paul Fletcher: Thanks Kieran.